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The Top 100 Trading Rules of All Time - Rayner Teo (Pdfdrive)
The Top 100 Trading Rules of All Time - Rayner Teo (Pdfdrive)
These are The Top 100 Trading Rules from the best traders I’ve come across. They have the
biggest impact on my trading and I believe their words of wisdom will go down for
generations to come.
To all my subscribers, followers and friends out there, old and new, thank you for the gift of
support. The Top 100 Trading Rules is to repay you for all the time and attention you’ve
given me. Here’s to you and your continued success!
Rayner Teo
1. Watch the market leaders, the stocks that have led the charge upward in a bull
market.
2. They say you never go broke taking profits. No, you don’t. But neither do you grow
rich taking a four-point profit in a bull market.
3. Successful trading is always an emotional battle for the speculator, not an intelligent
battle.
4. Remember that stocks are never too high for you to begin buying or too low to begin
selling.
5. Losing money is the least of my troubles. A loss never troubles me after I take it. I
forget it overnight. But being wrong – not taking the loss – that is what does the
damage to the pocket book and to the soul.
1. In order of importance to me are: (1) the long-term trend, (2) the current chart
pattern, and (3) picking a good spot to buy or sell. Those are the three primary
components of my trading. Way down in very distant fourth place are my fundamental
ideas and, quite likely, on balance, they have cost me money.
2. If I am bullish, I neither buy on a reaction, nor wait for strength; I am already in. I turn
bullish at the instant my buy stop is hit, and stay bullish until my sell stop is hit. Being
bullish and not being long is illogical.
3. If I were buying, my point would be above the market. I try to identify a point at which
I expect the market momentum to be strong in the direction of the trade, so as to
reduce my probable risk.
1. Make sure the stock has a well formed base or pattern such as one described on this
web site and can be found on the tab "Understanding Chart Patterns" on the home
page, before considering purchase. Dan highlights stocks with these patterns in his
newsletter.
2. Buy the stock as it moves over the trend line of that base or pattern and make sure
that volume is above recent trend shortly after this "breakout" occurs. Never pay up
by more than 5% above the trend line. You should also get to know your stock's thirty
day moving average volume.
3. Be very quick to sell your stock should it return back under the trend line or breakout
point. Usually stops should be set about $1 below the breakout point. The more
expensive the stock, the more leeway you can give it, but never have more than a $2
stop loss. Some people employ a 5% stop loss rule. This may mean selling a stock that
just tried to breakout and fails in 20 minutes or 3 hours from the time it just broke out
above your purchase price.
1. Don't buy cheap stocks. Buy Nasdaq stocks mainly selling between $15 and $300 a
share and NYSE stocks from $20 to $300 a share. Avoid the junk pile.
2. Buy growth stocks that show each of the last three years annual earnings per share up
at least 25% and the next year's consensus earnings estimate up 25% or more. Most
growth stocks should also have annual cash flow of 20% or more above EPS.
3. Make sure the last two or three quarters earnings per share are up a huge amount.
Look for a minimum of 25% to 30%. In bull markets, look for EPS up 40% to 500%
(The higher, the better).
4. See that each of the last three quarter's sales are accelerating in their percentage
increases, or the last quarter's sales are up at least 25%.
I appreciate each and every one of you for taking time out of your day or evening to read
this.
Lastly, if you haven’t already, you can follow me on Twitter (@Rayner_teo), and join in on the
conversations going on right now on my Facebook Group.
Rayner Teo